Health insurer Humana and two executives were hit with an investor class action on Monday, claiming they misled shareholders about the cost of pent-up demand for medical treatments once the COVID-19 pandemic subsided.
The Iron Workers Local 401 Annuity Fund filed a complaint against Humana, its CEO Bruce Broussard, and its Chief Financial Officer Susan Diamond on behalf of a proposed class of individuals and entities who purchased or acquired Humana common stock between July 27, 2022, and Jan. 24, 2024.
The start of the class period coincides with Humana’s announcement of its financial results for the second quarter of 2022, according to the complaint. The annuity fund says Humana reported “outperforming” adjusted earnings per share and attributed it to “better-than-anticipated medical cost trends in the company’s individual Medicare Advantage and Medicaid businesses.”
The annuity fund says the defendants continued to assure investors and analysts that “in-patient unit costs and non-in-patient trends [were] coming in lower than [the company] initially estimated” and that “‘there really isn’t pent-up demand that [the company has] to be concerned about’ negatively impacting utilization rates and profitability,” throughout the class period.
